Tuesday, January 18, 2011

Today, we tend to use the term "prophet" to mean a kind of fortune-teller. But good old classic propheteering like Jeremiah practiced was about delivering angry, impassioned harangues to His wayward people. Jeremiah was so talented and relentless, in fact, that today we call such written works "jeremiads." And, thanks to our Puritan past, Americans are supremely gifted at launching jeremiads against their own apparently endless inadequacies, despite 300 years of national ascent.

(For a quick tutorial on the difference between a "jeremiad" and a "manifesto," see here. To the extent Americans embrace jeremiads, they tend to hate manifestos, mostly because the only one they can ever think of is The Communist Manifesto.)

No place is the jeremiad more evident than in the world of business. American consulting--lecturing, authoring, blogging and assorted quote-monkeying--is a virtual petri dish for the angry harangue. Do this or your company will die. Do that or your employees will depart. Blink and you are lost. The wolf camps at your door. War, children, is just a shot away.

In a recent article in the HBR by Michael Porter and Mark Kramer we are warned: "The capitalist system is under siege. . .The legitimacy of business has fallen to levels not seen in recent history. . .A big part of the problem lies with companies themselves, which remain trapped in an outdated approach to value creation that has emerged over the past few decades."

Paul Nunes and Tim Breene advised to Reinvent Your Business Before It’s Too Late. Umair Hague argues in The New Capitalist Manifesto that “For too long, capitalists have taken people, communities, society, nature, and the future for granted — but today, they damn well shouldn't. Industrial-age capitalism is, we're discovering the hard way, predicated on extracting wealth from people, communities, society, nature, and the future. . .Argue with me all you like. . .but I believe that capitalism has reached a crossroads. To continue to fulfill its promise of being transformative. . .might just demand abandoning some — or even most — of yesterday's tired, toxic assumptions about what prosperity is. . . .”

It seems we're always getting yelled at.

We are apparently mismanaged, misorganized, mismarketed, misbranded, miscommunicated, misallocated, miscalculated, misincented, misemployed and often (told we are) just plain mis-erable. And it is our leadership--you and I and that hapless clown in the office next door--that misses the latest social networking trend, falls off the product life cycle, jumps into the wrong markets, outsources in all the wrong places, destroys value and brings misery to the masses on a daily basis.

We are, you and I, destroying capitalism.

We might note here, of course, that Jeremiah was beaten, imprisoned, and threatened with death. Today we make our jeremiahs best-selling authors.

The question I've always wondered is this, then: Do jeremiads make a difference? Do we pay our money, listen, and then just go about our merry way, doing the things that are truly compelling, the stuff that provides better reward?

And in doing so--in paying attention and reacting to the real stuff, and whistling through the graveyard--do we get it right or do we get it wrong?

And, if we get it wrong so often, why do things get so much better all the time?

I recently read two books nearly in parallel, Gary Hamel's The Future of Management and Alfred Chandler's Pulitzer-Prize-winning TheVisible Hand. The former is a jeremiad, more thoughtful and encouraging than most, but a stern lecture nonetheless on how we all mostly suck.

Chandler's book, whose subtitle might counter Hamel's as The History of Management, is a look at the rise of the modern business organization from 1840 till about 1920. Prior to 1840 we were all still laboring under 16th century production and distribution practices. By 1920, nearly everything that you and I would recognize about operating a business in the modern world was firmly in place.

In 80 years the world was turned upside-down by the convergence of coal (cheap, portable power); the telegraph (instant information); and the railroad (cheap, reliable national distribution). And, as entrepreneurs adapted to these conditions, the national standard of living skyrocketed, vast markets were created, and almost incomprehensible wealth was generated.

All without a jeremiad (or at least one we can remember).

Sometime later, apparently, we all got stupid. And now, should we believe the many jeremiads at hand, we're all just asleep at the switch, missing the ominous changes happening all around us, contributing to a dramatic fall from capitalist grace.

In The Future of Management, Hamel writes: "I dream of organizations that are capable of spontaneous renewal. . .I dream of businesses where an electric current of innovation pulses through every activity, where the renegades always trump the reactionaries. I dream of companies that actually deserve the passion and creativity of the folks who work there. . .Of course, these are more than dreams; they are imperatives. They are do-or-die challenges [my bold] for any company that hopes to thrive in the tumultuous times ahead-and they can be surmounted only with inspired management innovation."

Then Professor Hamel gets to the crux of the matter: "Now think back over the last 20 or 30 years of management history. Can you identify a dozen innovations on the scale of those that laid the foundations of modern management? I can't. Like the gasoline engine, our industrial-age management model is languishing out at the far end of the S-curve, and may be reaching the limits of its improvability."

But, fear not.

If there is one overwhelming lesson that Visible Hand teaches, it is this: When the conditions are right and truly compelling, we move. We react. We invent. We create. We innovate. Not all at once. Not in a straight line. (In fact, Schumpeter warns us that innovation is decidedly lumpy.)

And not everyone gets it, which is why there are plenty of losers.

What Chandler makes clear, though, is that wanting to innovate (as Hamel beseeches) may be a dandy impulse, being ready to respond to market conditions--when it's clear that a firm can make more money, be more efficient, or grow faster--is how leaders really create and adapt. When the market outruns their old processes they change. And guess what? Smart people know when that is, and they don't have to be told or read about it.

Getting scolded in a jeremiad, or threatened with death and damnation, may sell books, but it simply doesn't move us. Or, at least it doesn't move us anything like having a genuine threat or opportunity at our doorstep.

It might be pointed out, too, that missing an important trend and then hurrying to catch up is hardly deadly, and surely not the end of capitalism or civilization. In fact, such a strategy has become so common among successful companies that we've invented a business-sounding term for it: fast followers.

So, while I liked the ideas in the Hamel book, I found the history of Chandler overwhelmingly convincing. Any one of us can miss the important trend or the big idea, but as a collective we get it right. Not always as soon as we like, but we eventually get it right. Because it hurts too much to get it wrong.

So, Jeremiah was a prophet. But he was also a bullfrog, and a noisy one at that.

You might remember that the next time you're seeking a little business wisdom.

Saturday, January 8, 2011

Last night, the five couples who make up our book group met for the 71st time, just a few months shy of our tenth anniversary, to discuss Tatjana Soli's first novel, The Lotus Eaters. And as I looked around the room, I had the following thought: Ten years ago when we met, we would have had seven or eight copies of the actual book--real paper and ink--in our laps as we talked. By contrast, last night we had two books, two Kindles and three iPads. We also had six or seven smartphones of various shapes and sizes spread around the room for calendar-planning our next date.

Now, some of us lived through the vinyl to 8-track to cassette to CD to digital life-cycle of music (buying the same music four or five different times). And, if we think hard enough, we've lived through any number of other life-cycles: have you needed a bank teller lately, for example, or "perked" a cup of coffee in your kitchen? But I honestly cannot remember one that seems to have happened more quickly, or been quite so dramatic, as the digitization of the book.